banner
Business

Smaller banks stand tall amid financial chaos

Posted October 10, 2008

Map Marker  Find News Near Me

— Although Wall Street and major financial institutions have been knocked down in recent weeks, executives at smaller banks said they're standing strong.

"Our financial condition is very good," said Larry Barbour, president and chief executive of Raleigh-based North State Bank.

Barbour received his training at Wachovia Corp. before founding North State a decade ago, and he said the downfall of Wachovia and major Wall Street names like Merrill Lynch and Lehman Brothers is disappointing.

"It's sad. It's really sad," he said.

Still, he credited Wachovia for teaching him that sound business practices and profitability should always precede growth, and he said North State and other community banks stick to that philosophy.

"I don't know of any community banks that make or made sub-prime loans," he said of the questionable loans that helped bring down the larger banks. "We're really not capable of handling and understanding those types of investments and monitoring those and managing those."

North State continues to make other loans, Barbour said.

"We are (loaning money), but we will not do it unless there's a (customer) relationship in the bank," he said, adding that he thinks most community banks that began offering loans to non-customers will stop doing so.

Even with sound fundamentals, North State's stock price is down roughly 45 percent for the year.

"(With) our share price and the share price of (other) community banks, it's guilt by association," Barbour said.

5 Comments

This story is closed for comments.

Oldest First
View all
  • luvbailey Oct 10, 2008

    Districtadvocate, the wizzards of Wall Street did not create the market, the market was created by "Pres" Bill" and supported by his democratic House and Senate "collegues" seeking to expand home ownership beyond what the free market would provide. The true objective of this was "if we help the "otherwise unqualified" get into a house then we can take credit for it, and that will translate into votes for democrats." You do not have to be a rocket scientist to connect these dots. So quit blaming Wall Street and cast the blame where it truly lay.

  • luvbailey Oct 10, 2008

    districtadvocate, spoken like a true communist. Wall Street doesn't create markets, it reacts to markets. Your logic would have the illegal immigrants moving here, then creating jobs for themselves. When in reality they come here due to the demand for affordable labor.

  • districtcadvocate Oct 10, 2008

    The weapon of mass financial destruction was not opening the housing market to poorer people; whether renting or owning you end up paying for the house and property. The problem here was the deregulation of derivatives and other exotic securities or even the credit swaps that are the next shoe of financial doom to fall.

    If you have to salve your conscience with the thought that poorer people brought down the financial house of cards then you are prone to be hood winked by the next game of chance that Wall Street brings your way.

    There would have been no market for BAD sub-prime loans if the financial wizzards of wall street had not created the market. But then they spend their time dazzling congress with the brillance while all the while baffling themselves and the market with their BS.

  • Myword Oct 10, 2008

    God love the ones who remembered what a bank is actually supposed to be.

  • news4u Oct 10, 2008

    The current Economic Collapse began in 1999 when Clinton signed into law a sweeping overhaul of Depression-era banking laws allowing un-qualified borrowers to purchase homes with no money down in an attempt to "Be Fair".

    ''This legislation is truly historic,'' President Clinton told lawmakers and top financial regulators.

    ''We have done right by the American people.'' Clinton said.